The SEC filed securities fraud charges against former registered representative, William L. Walters for operating a Ponzi scheme promising annual returns ranging from 20% to 40%. According to the Complaint, from 2003 through 2006, Walters raised approximately $16.8 million from more than 80 investors under the false pretense that he would invest their funds in day trading in the securities markets. In reality, the Commission alleges, Walters deposited only a small fraction of investor funds into brokerage accounts, conducted very little trading in these accounts, and sustained heavy losses on the trading he did conduct. The Commission further alleges that Walters used approximately $11.4 million of investor funds to pay off prior investors in a classic Ponzi scheme pattern, using the rest largely to support his lavish lifestyle, with expensive cars and homes in Colorado and Hawaii.